The U.S. Federal Communications Commission should stay out of the way of states that have passed laws prohibiting or limiting city-funded broadband networks that compete with private services, several groups have told the agency.

The FCC, considering whether to preempt laws in 20 states that restrict municipal broadband projects, should instead give private broadband providers incentives to better service communities, several representatives of broadband providers wrote in comments to the agency.

The city of Wilson, North Carolina, and the Electric Power Board of Chattanooga, Tennessee, have asked the FCC to step in and remove state restrictions on their ability to offer broadband service. A long-simmering debate over whether cities should be able to offer broadband service gained traction in June, when FCC Chairman Tom Wheeler raised concerns about a Tennessee law that prevents Chattanooga from expanding its municipal broadband footprint.

“I believe that it is in the best interests of consumers and competition that the FCC exercises its power to preempt state laws that ban or restrict competition from community broadband,” Wheeler said then. “Given the opportunity, we will do so.”

The FCC would better encourage broadband deployment by giving funding incentives to private broadband providers, AT&T said in comments filed Friday, the deadline for the first round of comments in the agency’s proceeding on the petition from the two cities.

AT&T is “skeptical” that government-owned networks, or GONs in AT&T-speak, will deliver “world class broadband infrastructure,” the company’s lawyers wrote.

“GONs should not be utilized where the private sector already is providing broadband or can be expected to do so in a reasonable timeframe,” they wrote. “[GONs] discourage private sector investment because of understandable concerns by private sector entities of a non-level playing field. And any policy that risks diminishing private sector investment would be short-sighted and unwise.”

In several cases, municipal broadband projects haven’t lived up to their promises, noted Anne Veigle, senior vice president for communications at trade group USTelecom. Veigle, in a blog post, questioned the FCC’s authority to preempt state laws limiting municipal broadband.

States take several different approaches toward municipal broadband, with some requiring public votes, hearings or competitive bids before a project happens, she wrote. “States are well within their rights to impose these restrictions, given the potential impact on taxpayers if public projects are not carefully planned and weighed against existing private investment,” she added.

Several people filing comments in the FCC proceeding called on the agency to preempt state restrictions.

North Carolina’s restrictions are part of an “anticompetitive law, put in place by the large state telecom incumbents, which prevents local communication from controlling their own economic future by prohibiting them from making their own decision on how to obtain 21st Century broadband,” wrote state resident Carlos Ayala. “Half our population live in rural areas with no choice when the incumbents find them unattractive (or it leaves them begging for slim pickings.)”

One wired broadband service area ends about two miles from Dale Jobe’s home, the Tennessee resident wrote. “At this time, the only Internet services available have limited data access with outrageous overage fees,” he wrote. “With overage fees, my bill at its highest has been [US]$300.00 for one month. Once I reach a certain data limit, my internet is suspended until the start of the next billing cycle.”

North Carolina resident Todd Patton also called on the FCC to preempt the state’s law. “There is very little competition for broadband services in most areas today, leaving consumers at the mercy of a small handful of huge multi-national corporations like Time Warner Cable and AT&T to raise prices as they see fit,” he wrote. “Municipal broadband offers consumers an affordable choice and often at higher speeds than the big corporations choose to offer.”

Join the Network World communities on Facebook and LinkedIn to comment on topics that are top of mind.